Central Bank of Brazil Selic Rate Reduced by 75 Basis Points

May 7, 2020

Brazil’s Selic interest rate was cut yesterday by 75 basis points to 3.0%. Copom, the Central Bank of Brazil’s monetary policy committee, has been escalating the incremental size of its reductions, having cut the Selic rate by 25 basis points in February and 50 bps in March. According to a released statement, two of nine policymakers actually favored a full percentage point reduction this month, and the committee anticipates that the rate will be 2.75% later this year. Officials call the pandemic especially challenging for emerging economies and consider core inflation too low to be compatible with their inflation target. Projected GDP growth has been revised even more deeply into the red, but note is made that forecasts risks are both unusually high and two-sided.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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